11th Apr 2007 07:00
Vedanta Resources PLC11 April 2007 11 April 2007 Vedanta Resources Plc Production Results for the Fourth Quarter and Full Year Ended 31 March 2007 Highlights • Significant increase in full year ("FY 2007") production across all metals in India • Substantial contribution to aluminium, copper and zinc volumes from completed phase 1 projects, with plants now operating at near-rated capacities in the fourth quarter ("Q4") • Commissioning process commenced at Lanjigarh alumina refinery with bauxite charging • 38.4 MW wind power plant commissioned out of 125 MW ordered Performance Summary Finished metal production across all metals was higher than the precedingquarter and the corresponding quarter in the previous period, mainly because ofincreased contribution from stabilisation of phase 1 projects and successfulde-bottlenecking activities. Aluminium Production of 351,000 tonnes of aluminium in FY 2007 was significantly higherthan that of the previous year at 210,000 tonnes as a result of increase inproduction due to the full ramp-up of the new Korba smelter, which produced208,000 tonnes during the year. The stabilisation process of the new Korbasmelter was quicker than estimated and as a result the plant has consistentlyachieved rated capacity in the last two quarter with the fourth quarter outputat 62,000 tonnes, taking the total aluminium production in Q4 to 98,000 tonnes. Production from existing smelters at BALCO and MALCO was 143,000 tonnes inFY 2007, marginally higher than their rated capacity, as a result of continuousimprovement efforts. Copper Copper cathode production at our Indian operations in FY 2007 and Q4 was 313,000tonnes and 89,000 tonnes as compared to 273,000 tonnes and 75,000 tonnesrespectively, representing an increase of 15% and 19% over the correspondingprior periods due to de-bottlenecking of our facility at Tuticorin. Productionafter successful debottlenecking is steadily ramping up and contributing towardsadditional volumes in Q4, with production close to rated capacity in March 2007.The Tuticorin smelter was under planned shutdown for eight days in the firstweek of April 2007 for carrying out modifications and improvements, at thesulphuric acid plant. Mined metal production at our Australian mines of 6,000 tonnes in Q4 is lowerthan that of the corresponding period in the previous year due to a temporarytwo-week disruption in the mining activities as a result of minor rockfallincident. Post investigation of the incident by an independent expert, the sitewas declared safe and mining activities were restored in the month of March2007, which are expected to pick up to normal levels in the current quarter. Our Zambian operations produced 37,000 tonnes of copper cathode as compared with35,000 tonnes in the immediately preceding quarter. Our efforts to stabilisetail leach plant have shown positive trends with a production of 4,000 tonnes inMarch 2007. Smelter output has also shown an improvement with the anodeproduction at 12,000 tonnes in the month of March 2007. Consistent output fromthe smelter requires plant reliability, which is sought through a series ofmeasures including a partial plant shutdown in April 2007 for 20 days for majoroverhauling. Zinc Refined zinc production during FY 2007 was 348,000 tonnes, compared with 284,000tonnes in FY 2006, up by 23% due to the ramp-up of new hydro smelter atChanderiya. The total zinc production in Q4 was 95,000 tones. Surplus zincconcentrate of 70,000 dry metric tonnes was sold in Q4. Mined zinc metal production was 505,000 tonnes for FY 2007 representing anincrease of 7% over the corresponding previous year. The increase in productionwas primarily due to improved production from Rampura Agucha mines. Gold The lower output during the quarter at Sterlite Gold Limited is due to thesuspension of mining operations pending resolution of some of the key clauses inthe implementation agreement entered into with the Government of the Republic ofArmenia. Pricing Environment While sales volumes across all three metals - aluminium, copper and zinc - werehigher, prices of copper and zinc have witnessed a downward trend in Q4 comparedwith the third quarter of FY 2007. Additionally, import tariffs on metals inIndia were reduced from 7.5% to 5.0% in the last week of January 2007. Projects Update Aluminium Progressive commissioning of the alumina refinery at Lanjigarh has commencedwith the charging of sourced bauxite, in the last week of March 2007 in thefirst of the two streams. One unit of the captive power plant was commissionedin February 2007 and is under stabilisation. After completion of the processingcycle, output of alumina will commence by the end of the first quarter ofFY 2008. Detailed engineering of the 500,000 tpa of the green-field aluminium smelter atJharsuguda is largely complete and orders for critical equipment for the smelterand captive power placed with vendors. Construction work both at the smelter andassociated captive power plant of Phase I of the project are in full swing andare on track to commissioning by mid-2009. Copper The work on the Konkola Deeps expansion project is progressing well with ordersfor all major long-lead items placed. Work on the head gear foundation andcollar for the main shaft has been completed. Shaft sinking is progressing asper schedule and the main shaft has been sunk to a level of 34 metres. Work onthe concentrator is also progressing well according to the planned schedule. Thebasic engineering and ordering activities for the 250,000 tpa Nchanga smelterexpansion project are largely complete with construction activities in fullswing to meet the scheduled completion date in 2008. Zinc The construction activities of the new 170,000 tpa Chanderiya hydro smelter andassociated captive power plant are progressing on schedule, to be commissionedby early 2008. Work on the debottlenecking project at HZL to increase thecapacity by 88,000 tonnes and new captive power plant of 80 MW at Zawar isprogressing well and will be completed as per schedule in early 2008. As regards the green energy project undertaken by HZL, a turnkey contract for125 MW wind power plant had been placed, of which the first phase of 38.4 MW wascommissioned in March 2007 in the State of Gujarat in India. The remainingcapacity is expected to be commissioned progressively during FY 2008. Power Basic engineering work on the new $1.9 billion greenfield 2,400 MW integratedpower project at Jharsuguda has recently commenced. The project is progressingas per schedule. Production Summary (Unaudited) (in '000 tonnes, except as stated)-------------------------------------------------------------------------------- Q4(1) Change Q3(1) Year ended Change 31 March 2006-07 2005-06 2006-07 2006-07 2005-06--------------------------------------------------------------------------------Alumina 80 77 3.9% 69 299 296 1.0%Aluminium 98 68 44.1% 98 351 210 67.1%Copper India/AustraliaMined metal 6 8 -25.0% 7 28 34 -17.6%contentCopper - Cathode 89 75 18.7% 86 313 273 14.7%Copper - Rods 51 46 10.9% 41 178 167 6.6%Copper ZambiaMined metal 19 17 11.8% 21 84 99 -15.2%contentCopper - Cathode 37 37 - 35 142 164 -13.4%Zinc - Mined 121 125 -3.2% 128 505 472 7.0%Metal ContentRefined Zinc 95 92 3.3% 93 348 284 22.5%Equivalent Gold 1,923 - - 12,911 17,662 - -(oz)(2)--------------------------------------------------------------------------------1. Q4 - fourth quarter ended 31 March 2007 and 2006, respectively, Q3 - Third quarter ended 31 December 2006, respectively 2. Quantities of equivalent gold represent production for the year ended 31 March 2007 represents post acquisition period of seven months to 31 March 2007, and are not directly comparable with the corresponding prior periods For further information, please contact:Sumanth Cidambi [email protected] Director - Investor Relations Tel: +44 20 7659 4732 / +91 22 6646 1531Vedanta Resources plc Faeth Birch Tel: +44 20 7251 3801Alex PettiferFinsbury About Vedanta Resources plc Vedanta Resources plc is a London listed diversified metals and mining group.Its principal operations are located throughout India, with further operationsin Zambia, Australia and Armenia. The major metals produced are aluminium,copper, zinc, lead and gold. For further information, please visitwww.vedantaresources.com. Disclaimer This press release contains "forward-looking statements" - that is, statementsrelated to future, not past, events. In this context, forward-looking statementsoften address our expected future business and financial performance, and oftencontain words such as "expects," "anticipates," "intends," "plans," "believes,""seeks," "should" or "will." Forward-looking statements by their nature addressmatters that are, to different degrees, uncertain. For us, uncertainties arisefrom the behaviour of financial and metals markets including the London MetalExchange, fluctuations in interest and or exchange rates and metal prices; fromfuture integration of acquired businesses; and from numerous other matters ofnational, regional and global scale, including those of a political, economic,business, competitive or regulatory nature. These uncertainties may cause ouractual future results to be materially different that those expressed in ourforward-looking statements. We do not undertake to update our forward-lookingstatements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Vedanta Resources